If the Cost Method Is Used to Account for a Long-Term

question 149

Multiple Choice

If the cost method is used to account for a long-term investment in common stock dividends received should be

• A) credited to the Stock Investments account.
• B) credited to the Dividend Revenue account.
• C) debited to the Stock Investments account.
• D) recorded only when 20% or more of the stock is owned.

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Definitions:

Estimated Regression Equation

A mathematical representation derived from regression analysis that estimates the relationship between variables.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a specified period of time.

Price

The amount of money expected, required, or given in payment for something.

Correlation Analysis

The study of how variables are related and the measurement of the strength and direction of this relationship.